Saying sorry can be a good business decision

This article first appeared in The Brief, the specialist law pages of The Times. It argues that while it is often easy to see why lawyers’ first instinct is to be extremely cautious, there are times when embracing the apology clause would serve their clients better.

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A poorly handled first response makes a crisis even worse

The Apology Clause campaign has been set up to make it easier for businesses to behave with compassion when things go wrong, to help victims have better recoveries.

It is not well known that the law supports apologies. The Compensation Act 2006 says “an apology, an offer of treatment or other redress, shall not itself amount to an admission of negligence or breach of statutory duty”.

Yet too often when businesses should act on that clause they don’t.

Focusing on avoiding any possible legal ramifications can be at the expense of doing the right thing. And doing that can often prevent legal action, reducing risk and saving money.

Crises are rarely predictable and usually stressful. People do not always perform at their best. Real information is typically in short supply. The media and social media picture can move fast. The client is often torn with feelings of sorrow, injustice, confusion and fear.

In the crisis team everyone has a role. Operations and customer service focus on what the organisation can do differently. Investor relations protect financials. Communications look to the organisation’s reputation, often the consumer interest. And the lawyers protect liability.

These teams are rightly set up with built-in tensions. They are not necessarily meant to agree. They are meant to make their case. Then senior management’s role is to decide the line to walk. There is rarely a “no risk” option, so that choice is usually which risks to entertain.

Unsurprisingly, this can go wrong.

United Airlines got into trouble when film of one of its passengers being violently removed from a flight went global. In the cold light of day, it was clear the CEO’s first statement did not hit the right note: “I apologise for having to re-accommodate these customers”.

But these decisions are rarely made in the cold light of day.

Apology Clause campaigns to put “sorry” on the map

That’s why we believe it is so important to raise awareness among business, lawyers and insurers of the apology clause in the Compensation Act 2006.

Handling issues better at the outset can prevent them from becoming crises. A well-handled apology can avoid the costs and risks of going to court. Even in court, a good apology can reduce settlement costs.

In Canada, a class action against Maple Leaf foods which set out looking for $100 million settled for an awful lot less. The class was so impressed with the way Maple Leaf had apologised and set about improving industry standards.

A simple apology can lift the burden that victims very often carry for a long time after a trauma. It can enable them to move on. To rebuild.

“Sorry” really does make a difference to victims, as it can for the reputations and financials of businesses caught in the eye of the storm. While it is easy to see why lawyers’ first instinct is to be extremely cautious, there are times when embracing the apology clause would serve their clients better.